Business Directories

Hikma Pharma to spend $300m on expansion

Dubai, April 1, 2012

London-listed Hikma Pharmaceuticals plans to spend nearly $300 million on acquisitions and expansion initiatives in 2012 amid strong growth prospects in the Middle East and North Africa, its chief financial officer said.

"In terms of acquisitions we can do $150-$200 million this year through debt. We are also planning to invest $90 million on expansions at the group level financed by the internal cash generation," Khalid Nabilsi told Reuters.

"Our focus in 2012 is going to be on product acquisitions that complement our own businesses," he added.

Jordan-based Hikma, which sells branded drugs and also has an injectable drugs business in Europe and the US, expects to benefit from people demanding a better quality of life as a result of the Arab spring uprisings.

"The new regimes and governments believe more in social services; they are committed to invest billions on healthcare and education," Nabilsi said.

Healthcare spending per capita in the Mena region is below $100, compared with $900 in the United States and Europe. The sector is witnessing 12 percent growth in the region, compared with 2 percent in Europe, Nabilsi said.

Hikma, whose shares are a constituent of London's FTSE 250 midcap index, is a generic drug and injectables specialist and generates almost 50 per cent of its revenue from the Mena region. It operates in 17 countries in Mena and has plants in countries including Morocco, Egypt, Tunisia and Sudan.

It also has plants in Europe and the United States.

Nabilsi said he was expecting a strong performance in 2012, with revenue growth expected to be about 20 percent, driven by opportunities in Mena and in the global injectable drugs market.

The company is now eyeing expansion in Iraq, Turkey and North Africa, and Nabilsi said Turkey was a big market while South Africa was an "interesting opportunity."

Hikma gave a positive outlook for growth in 2012 last month despite reporting a dip in profits for 2011, reflecting a weaker performance from its generics drugs units and costs from higher wages and currency fluctuations in the Mena region.

Adjusted profit attributable to shareholders fell 2.2 percent last year to $100.9 million although revenue rose 25.6 percent to $918 million. - Reuters